PELOSI GETS IT…. If more policymakers embraced House Speaker Nancy Pelosi’s approach to economic recovery, we’d all be better off. Here’s the Speaker this morning, during a conference call:
“We’re never going to decrease the deficit until we create jobs, bring revenue into the Treasury, stimulate the economy so we have growth. We have to shed any weakness that anybody may have about not wanting to be confrontational on this subject for fear that we’d be labeled not sensitive to the deficit. … The American people have an anger about the growth of the deficit because they’re not getting anything for it…. So if somebody has the idea that the percentage of GDP of what or national debt is will go up a bit, but they will now — and their neighbors and their children — will have jobs, I think they could absorb that…. If we pull our punch, as they did in the mid-30’s, we shouldn’t be surprised if history repeats itself.”
By “history,” Pelosi was no doubt referring to the 1937 effort on the part of FDR’s administration to move away from stimulating the economy and towards deficit reduction. The shift was a mistake — when policymakers should have kept spending, they instead started bringing down the deficit. Economic conditions quickly deteriorated again, after several years of progress.
And now, we’re poised to see this happen again. Recovery efforts rescued an economy on the brink, leading to widespread talk within the establishment to shift away from job creation and economic growth, and towards spending cuts and deficit reduction. The talk has already convinced far too much of the public to believe nonsense, which in turn has rattled anxiety-ridden political leaders.
Pelosi’s assertion couldn’t be more accurate: “The debate between deficit reduction and job creation is not a real choice, because we’ll never have deficit reduction unless we have job creation. Of course we have to be sensitive to how this is paid for, but that doesn’t mean we don’t do it.”
Given the ongoing economic difficulties, there’s no reason in the world for so many in the political establishment to want to take their foot off the gas. For politicians, this should be an especially easy call — voters tend to be happier when the economy and job market are stronger.
This ain’t rocket science, folks.